Week E11.15 ExercisesExercise 11-15Before AfterAfterActionDividendStock SplitStockholders equityPaid in capitalCommon stock,$10 par600,000630,000600,000Paid in capital in excess par value0 .12,0000Total paid in capital600,000642,000600,000Return earnings900,000858,000900,000Total stock holders equity 1,500,0001,500,0001,500,000Outstanding shares60,00066,000120,000Exercise 12-11. Companies purchase investments in debt or stock securities because they have excess cash, earnings from investment income, and strategic reasons.2. A company will have excess cash it does not need for operations because of seasonal fluctuates it sales. The company will use excess funds for a bigger return than holding in the bank.3. A typical investment when investing cash for a short period of time would be a short term government security. 4. A typical investment when investing in cash to generate earnings would be investing in debt.5. A company would invest in securities that provide zero cash flow for strategic reasons such as influence over customers or make presence known by a related company in the industry.6. A ty